Bank of Ceylon successfully raises Rs.10bn via equity-like bond

• Says bond issue snapped up on opening day
• Initial issue of Rs.3bn oversubscribed by more than 3 times
• Second AT1 capital perpetual bond issue during this year

State banking giant Bank of Ceylon (BOC) successfully raised Rs.10 billion through the issuance of Basel III compliant, unlisted, rated, unsecured, subordinated, perpetual, additional tier 1 (AT1) capital bonds with non-viability full and permanent write down at an issue price of Rs.100 each on December 1, 2020.

The initial issue of Rs.3 billion was oversubscribed by more than three times on its opening day and the bank decided to close it the same day. 

Commenting on the issuance, the bank’s General Manager, D.P.K. Gunasekera said this was the bank’s second AT1 capital perpetual bond issue during this year, and the oversubscription of this issuance highlights the strong confidence the investors have placed on all aspects of the bank’s performance. 

He also thanked the bank’s customers and investors for their confidence shown in the strength, stability and growth prospects of the bank.

Being a domestic and systemically important bank that has an innate responsibility towards maintaining the financial stability and economic development of Sri Lanka, BOC looks forward to utilize these funds towards financially boosting the priority sectors of the country whilst strengthening the Tier 1 capital and enhancing the single borrower exposure limit encouraging entrepreneurship and investment within 
the country. 

This will largely benefit retail to large scale private and public sector enterprises to improve their businesses and eventually contribute towards the country’s overall 
economic performance.

The AT1 capital perpetual bonds are not listed on the Colombo Stock Exchange and are confined to qualified investors. The bonds are irredeemable and may be callable by the bank at its discretion at any time after 5 years from the date of issue subject to Central Bank approval. 

The bonds carry a floating interest rate of Weighted Average 12 months net Treasury Bill rate plus 1.50 percent p.a. with a floor rate of 9.00 percent p.a. The bonds are rated AA (hyb) by ICRA Lanka Ltd.

This bond issue was approved by the Securities and Exchange Commission of Sri Lanka and Central Bank of Sri Lanka.

The Managers and the Registrars for the issuance was the Investment Banking Division of Bank of Ceylon.